Setting up a Charity to change the general public view...
Discussion
I am 20 years old and I am due to sell my car within January hopefully to start up a Charity, or a Business of some sort, I should have around £15,000 to play with.
I really want to help good causes out, there is a public outcry in regards with the way charities are run, such as the misuse of the funds the general public donate on paying their ceo's 6 figure salaries, wasting the money on advertising & other stupid things instead of using the money for what was esentially donated for.
I was thinking of starting a trust to begin with as it seems less complicatied from what I seem to grasp of.
I strongly believe that is a market out there for another Charity to start up, cause a stir, bang heads together, and really change the way the bunch conduct themselves with the use of funds being donated to them.
Basically the charity will be a non profit one and it will essentially be set up to provide 100% transparcey on all donations being taken in, with a promise that funds will be used in a certain timeframe (weeks - 3 months) and to be used to sit on and invest in portfolios, like Children In Need and many other's do.
Instead of handing out cheques to good causes, the trust will buy the resources, example: Hospital need equipment - We contact the supplier, buy the equipment and give it to the hospital.
Obviously it's early days but do you think something like this could really take off and work?
I think the hardest part will be starting off, knocking on doors and convicing people to part with their money where the majority have lose faith in all of them. The difficult part is proving and showing that this one is different.
I really think though it will only take one, or two famous or sort of an influenced figure out there to credit the work the charity does for it to really take off.
What are people's thoughts on this? I personally think it's a fantastic idea, the public are outranged but from the record taking Children In Need took in the other day on BBC (They could lie about the figure mind you) it seems people still don't mind parting their cash to these existing rob merchants even though they are clearly set up for the financial gain and not for the intending purpose of their existence.
Kind Regards
I really want to help good causes out, there is a public outcry in regards with the way charities are run, such as the misuse of the funds the general public donate on paying their ceo's 6 figure salaries, wasting the money on advertising & other stupid things instead of using the money for what was esentially donated for.
I was thinking of starting a trust to begin with as it seems less complicatied from what I seem to grasp of.
I strongly believe that is a market out there for another Charity to start up, cause a stir, bang heads together, and really change the way the bunch conduct themselves with the use of funds being donated to them.
Basically the charity will be a non profit one and it will essentially be set up to provide 100% transparcey on all donations being taken in, with a promise that funds will be used in a certain timeframe (weeks - 3 months) and to be used to sit on and invest in portfolios, like Children In Need and many other's do.
Instead of handing out cheques to good causes, the trust will buy the resources, example: Hospital need equipment - We contact the supplier, buy the equipment and give it to the hospital.
Obviously it's early days but do you think something like this could really take off and work?
I think the hardest part will be starting off, knocking on doors and convicing people to part with their money where the majority have lose faith in all of them. The difficult part is proving and showing that this one is different.
I really think though it will only take one, or two famous or sort of an influenced figure out there to credit the work the charity does for it to really take off.
What are people's thoughts on this? I personally think it's a fantastic idea, the public are outranged but from the record taking Children In Need took in the other day on BBC (They could lie about the figure mind you) it seems people still don't mind parting their cash to these existing rob merchants even though they are clearly set up for the financial gain and not for the intending purpose of their existence.
Kind Regards
Rick101 said:
What wage are you planning to take?
Absoloutely nothing. I will jugle part-time work and college.12 - 18 months if things change which means I need to put full-time hours in, hard to say obviously with the donations but a few hundred?
I am looking into any Gov backed funding for charities to start up Office space/low buisness rates and so on but info not very clear.
Website can be taken care of. I also have a good friend with contacts with prweb.com argubably one of the biggest PR companies in the world. £2K+ PR's, let's say I pay only a few hundred....
Chiddo said:
Rick101 said:
What wage are you planning to take?
Absoloutely nothing. I will jugle part-time work and college.12 - 18 months if things change which means I need to put full-time hours in, hard to say obviously with the donations but a few hundred?
You may find it distasteful that some charities pay their senior teams what appear to be big sums and, as a knee jerk reaction, see this as money going to waste however when you end up dealing with organisations with £multi-million you need people with certain competencies to run them - and by the time someone has acquired those they've probably also picked up a wife/mortgage/kids and the associated costs.
If you want to pay well below market then it leaves you in a position where you need to find someone already happy to live on much less, of independent means, or willing to make some serious sacrifices and impose them on their loved ones. They are out there but probably few and far between.
BTW, why do you think advertising is a waste? If you could spend £1 on advertising to bring in £3 then surely it would make sense?
Don't take this the wrong way, but I think you need to really spend some time thinking about how charities operate and why. They're not necessarily perfect, but neither are they necessarily the "rob merchants" you assert they are.
You cite Children in Need as an example of sitting on money, but you don't seem to understand anything about it.
If you're funded through money that is donated up front, and your projects run for multiple years, how much operating cash are you going to have at any one time?
You should also look at the rules for UK charities which include requirements about how to handle cash and that the best return must be generated.
I'm sure there is some bloat within CIN - they were heavily criticised in the past - but you don't seem to have a handle on it.
If you're funded through money that is donated up front, and your projects run for multiple years, how much operating cash are you going to have at any one time?
You should also look at the rules for UK charities which include requirements about how to handle cash and that the best return must be generated.
I'm sure there is some bloat within CIN - they were heavily criticised in the past - but you don't seem to have a handle on it.
Also, CIN now claim this:
BBC said:
For every penny you give us, a penny will go towards projects helping disadvantaged children and young people here in the UK. We are able to make this promise because BBC Children in Need uses its investment income, Gift Aid on donations and merchandise sales to cover all running costs.
So calling them 'rob merchants' makes you a bit of a dick.So you're going to tackle the bloated UK charity sector, by starting another charity?
Don't get me wrong, you're aims seem good, but founding and raising awareness for a charity which has no specific aims (i.e. fighting cancer, looking after rescued dogs etc) will be hard, unless you have a captive market. Charities like that tend to be backed by organisations like the Freemasons, or Rotary, which have an existing pot of willing donors who have faith and trust in their organisation.
I would suggest you start by going to work or volunteer for a charity for a few years, as you can't take on the sector if you don't truly understand how it works. And remember that charities come in all shapes and sizes, the problems you identify with the big nationals are not the same problems that you'll see in a local hospice or similar.
Don't get me wrong, you're aims seem good, but founding and raising awareness for a charity which has no specific aims (i.e. fighting cancer, looking after rescued dogs etc) will be hard, unless you have a captive market. Charities like that tend to be backed by organisations like the Freemasons, or Rotary, which have an existing pot of willing donors who have faith and trust in their organisation.
I would suggest you start by going to work or volunteer for a charity for a few years, as you can't take on the sector if you don't truly understand how it works. And remember that charities come in all shapes and sizes, the problems you identify with the big nationals are not the same problems that you'll see in a local hospice or similar.
trashbat said:
Also, CIN now claim this:
The OP can obviously benefit from much of the advice above, but I do have sympathy for his point of view, which the extract that Trashbat has quoted entirely substantiates!BBC said:
For every penny you give us, a penny will go towards projects helping disadvantaged children and young people here in the UK. We are able to make this promise because BBC Children in Need uses its investment income, Gift Aid on donations and merchandise sales to cover all running costs.
So calling them 'rob merchants' makes you a bit of a dick.I find it disgraceful that the management of a charitable concern consider it reasonable to:
1. retain funds for investment (which is not their core business) rather than using them directly for the cause that the benefactors intended, and
2. use the gains on investment for management costs; which in an inflationary environment leaves less for the charity - although I appreciate that there may be a surplus which does go to the charity, and
3. use Gift Aid (which must be c.25% of total donations) for management costs rather than using them directly for the cause that the benefactors intended, and
4. use commercial profits from merchandising for management costs rather than using them directly for the cause that the benefactors intended
The acid test, and it should be published but I haven't checked, is how much of the total of
Donations + Gift Aid + Investment Returns + Merchandising Profits
actually gets to the ultimate beneficiary?
I suspect not much!
sideways sid said:
trashbat said:
Also, CIN now claim this:
The OP can obviously benefit from much of the advice above, but I do have sympathy for his point of view, which the extract that Trashbat has quoted entirely substantiates!BBC said:
For every penny you give us, a penny will go towards projects helping disadvantaged children and young people here in the UK. We are able to make this promise because BBC Children in Need uses its investment income, Gift Aid on donations and merchandise sales to cover all running costs.
So calling them 'rob merchants' makes you a bit of a dick.I find it disgraceful that the management of a charitable concern consider it reasonable to:
1. retain funds for investment (which is not their core business) rather than using them directly for the cause that the benefactors intended, and
2. use the gains on investment for management costs; which in an inflationary environment leaves less for the charity - although I appreciate that there may be a surplus which does go to the charity, and
3. use Gift Aid (which must be c.25% of total donations) for management costs rather than using them directly for the cause that the benefactors intended, and
4. use commercial profits from merchandising for management costs rather than using them directly for the cause that the benefactors intended
The acid test, and it should be published but I haven't checked, is how much of the total of
Donations + Gift Aid + Investment Returns + Merchandising Profits
actually gets to the ultimate beneficiary?
I suspect not much!
Except retaining funds for investment seems reasonable.
If you are funding a multi-year project then you need to set funds aside for the entire duration of that project. It would be wrong to rely on future donations. If they dried up then you would be left with an incomplete project and massive waste. You might as well get interest on the funds. Using the interest to cover administrative costs is wrong though imho.
To say that 'every penny you give us, a penny will go towards projects helping disadvantaged children' when a very substantial proportion of total income is used in administration seems designed to create a false impression.
I wonder how much of the money that they give out is given to other charities with their own administrative costs.
Point 1 is addressed above. Let's suppose you run a charity. You say that one of your projects is to build ten new clinics over the next ten years at a cost of £10m each. I turn out to be a wealthy philanthropist and give you a £100m lump sump today in support of your goal. What do you do with it?
Charities don't run on thin air. It'd be nice if they were given free office space, utilities etc and were flooded by competent volunteers from the head downwards, didn't have to market themselves and so on, but it doesn't happen. Prevent them taking any cut for overheads and you might as well get rid of the charity altogether - presumably not what you had in mind.
There is a legitimate question as to what level of overheads are reasonable, but you as a donor can decide whether a particular charity's is reasonable.
Charities don't run on thin air. It'd be nice if they were given free office space, utilities etc and were flooded by competent volunteers from the head downwards, didn't have to market themselves and so on, but it doesn't happen. Prevent them taking any cut for overheads and you might as well get rid of the charity altogether - presumably not what you had in mind.
There is a legitimate question as to what level of overheads are reasonable, but you as a donor can decide whether a particular charity's is reasonable.
The high profile charities that people seem to moan about rather a lot on here are, in number, a very small proportion of the overall number of charities in the UK. Whether you believe all that is typed about their behaviour or not, they do not represent the sector as a whole.
OP, rather than setting up a charity "for the sake of it" and for no particular purpose you would be much better to raise money for a particular charity where you feel charitable objectives you approve of will be effectively and efficiently achieved.
Alternatively, find a cause you are interested in and get involved directly as an employee, volunteer, or even trustee if you have the skills.
Small single cause charities with no clear direction often have short lifespans due to poor management, as well as potentially duplicating the charitable work of others which is not efficient.
OP, rather than setting up a charity "for the sake of it" and for no particular purpose you would be much better to raise money for a particular charity where you feel charitable objectives you approve of will be effectively and efficiently achieved.
Alternatively, find a cause you are interested in and get involved directly as an employee, volunteer, or even trustee if you have the skills.
Small single cause charities with no clear direction often have short lifespans due to poor management, as well as potentially duplicating the charitable work of others which is not efficient.
trashbat said:
nyt said:
Using the interest to cover administrative costs is wrong though imho.
What do you think the admin costs should be covered by?Admin costs are obviously real and need to be raised. I have no problem with that.
But they should be transparent. So that I can see that chidren-in-need uses (say) 5% of its total income in admin and Save-the_children 15% (source:http://www.savethechildren.org.uk/get-involved/leave-a-legacy/questions-and-answers.
That would at least allow a comparison of the 'efficiency' of two similar charities.
This page is interesting: http://www.smallcharitydirectory.co.uk/what-percen...
Non-charity spend seems to be between 10% and 27%. Quite a variance.
FWIW I do give to charity and always have. But I'd like to know that as much as possible of the money that I give goes to the people that need it.
I completely appreciate that a successful charity will benefit from a strong management team and that there is a cost to that.
I also appreciate that a charity may need to reserve funds for future spend that it commits to.
Using a simple commercial example, a property company might use its own cash and borrow more to buy a property, which it rents out on the best terms it can. It pays interest on the debt from gross rental income, subtracts management costs and pays the remainder to shareholders. It is easy to compare the published accounts of two property companies to see how efficient the two management teams were, in terms of the value that they added against the cost of them. It would be nice if this transparency was readily-available in the charity sector.
All charities should (and perhaps they do?) offer a simple ratio to say that net donations to the ultimate cause were x%, or the inverse, that of the total of the four sources of funds given in the BBC article, (1-x%) was used in costs.
Edit: oops, didn't mean to partially repeat previous post. +1
I also appreciate that a charity may need to reserve funds for future spend that it commits to.
Using a simple commercial example, a property company might use its own cash and borrow more to buy a property, which it rents out on the best terms it can. It pays interest on the debt from gross rental income, subtracts management costs and pays the remainder to shareholders. It is easy to compare the published accounts of two property companies to see how efficient the two management teams were, in terms of the value that they added against the cost of them. It would be nice if this transparency was readily-available in the charity sector.
All charities should (and perhaps they do?) offer a simple ratio to say that net donations to the ultimate cause were x%, or the inverse, that of the total of the four sources of funds given in the BBC article, (1-x%) was used in costs.
Edit: oops, didn't mean to partially repeat previous post. +1
Many thanks on the responses, some really useful information taken on board and has taken me be back actually. I do not think now would be advisable to start one up until I've actually done some core volunteering work for an exsisting charity and learn the ropes before jumping into the deep blue sea.
Also see now as pointed, it's a bit pointless starting up a trust/charity without having any specific cause for fundraising/creating awarness.
Many thanks!
Also see now as pointed, it's a bit pointless starting up a trust/charity without having any specific cause for fundraising/creating awarness.
Many thanks!
Huh, you are the first person I've come across that shares my view of charity's.
Usually when I try to explain how wasteful they are and why I refuse to give them money I tend to meet the same phrase "Something is better than nothing".
Heck, my own mother even works for a charity where she knows only 10% goes to the cause and yet still gives to other charity's!
Can't help but think as people are so incessant on throwing money away it might actually be worth cashing in on rather than trying to fix. I hear there is a lot of paperwork though...
Usually when I try to explain how wasteful they are and why I refuse to give them money I tend to meet the same phrase "Something is better than nothing".
Heck, my own mother even works for a charity where she knows only 10% goes to the cause and yet still gives to other charity's!
Can't help but think as people are so incessant on throwing money away it might actually be worth cashing in on rather than trying to fix. I hear there is a lot of paperwork though...
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